In its continuous endeavor to make the public issue process efficient, SEBI had introduced ASBA facility which investors have been enjoying for subscription to public issue of equity capital of companies. It has been decided to extend ASBA facility to the investors subscribing to New Fund Offers (NFOs) of mutual fund schemes.
It shall co-exist with the current process, wherein cheques/ demand drafts are used as a mode of payment. The banks which are in SEBI’s list shall extend the same facility in case of NFOs of mutual fund schemes to all eligible investors in Mutual Fund units. Mutual Funds shall ensure that adequate arrangements are made by Registrar and Transfer Agents for the implementation of ASBA. Mutual Funds/AMCs shall make all relevant disclosures in this regard in the SAI. Also, SEBI circulars dated July 30, 2008, September 25, 2008 August 5, 2009 and December 30, 2009 related to ASBA shall be followed to the extent applicable.
Reduction of NFO Period-
a. In order to make NFO process efficient, it has been decided to reduce the NFO period to 15 days.
b. However, the NFO period in case of ELSS schemes shall continue to be governed by guidelines issued by Government of India.
c. Mutual Funds/AMCs shall make investment out of the NFO proceeds only on or after the closure of the NFO period.
Applicability: The Mutual Funds/AMCs have to compulsorily provide ASBA facility to the investors for all NFOs launched on or after July 01, 2010. The provisions mentioned at paragraph 2(ii) regarding reduction in NFO period shall also be applicable for all NFOs launched on or after July 01, 2010.
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